In This Market It Is Price, Price, Price
The Baltimore Sun reports from Maryland. “Richard Lunsford feels as if he’s watching the economy fall apart, and along with it, his plans for retirement. Housing sales are weak - a pointedly painful fact for Lunsford, who runs a construction business from his Pasadena home. ‘Right now, there’s hardly any work at all. No one’s buying houses, no one’s repairing houses, no one’s building,’ he said. ‘I probably won’t get to retire. I’m living on my savings right now.’”
“Those who planned to make money trading in their big homes for smaller ones can no longer count on quick sales or top dollar pricing. Two weeks ago, Wendy Sigler rearranged her 401k to help mitigate potential losses’. In her early 50s now, she had hoped to retire from her job within a decade, but she’s no longer sure that will be possible.”
“The equity that she and her husband have in their Ellicott City home has steadily declined, while expenses have risen.”
“‘The tentative [retirement] plans that I had put in place change with the fluidity of the market on a month-to-month basis,’ she said. ‘A lot is going to depend on what happens over the next few years in the economy. I have to have enough money before I can even think about retiring.’”
“Half of working families do not put anything away for retirement, and those who do have average savings of just $35,000.”
“‘We have a lifelong financial savings plan crisis in this country today,’ said Joseph DeMattos Jr., the Maryland AARP director, adding that there needs to be some sort of bipartisan political intervention to stimulate a savings spree.”
“Lunsford needs the housing market to rebound before he can even think about retiring, and he has all but given up on doing it early.”
“‘My father is in the same business, and he’s having the same problems,’ Lunsford said.”
The Capital from Maryland. “The rise in home foreclosures across Anne Arundel County could slow economic growth this year, stunting consumer spending, pulling down home prices and affecting developers putting together new deals, economists and observers of the local market said.”
“There were 1,800 foreclosure filings in the county by the end of last year, a roughly 40 percent increase from the 1,300 filings in 2006, said Clerk of the Circuit Court Robert Duckworth, who added he hasn’t seen this many filings since the dot-com bust around 2000.”
“‘It’s a problem in Anne Arundel, absolutely,’ said April Richardson, a foreclosure attorney in Annapolis, who said she has seen foreclosure cases increase in areas such as Annapolis and Crownsville over the past year. ‘I have homeowners who live in multimillion-dollar homes that are in the same position. It’s affecting upper-class and well-educated people.’”
“The foreclosure problem stems in part from an inflated home market that saw skyrocketing home prices and sales, but then began to decline.”
“Lakshman Achuthan, managing director of the Economic Cycle Research Institute, said foreclosures also will add to the housing supply and cause a downturn in home prices. ‘You get in a little bit of a vicious circle,’ he said.”
“‘The days of having close to 100 percent financing are certainly behind us for the time being,’ he said.”
The Washington Times. “The overvaluation of homes has created a buyers strike as potential buyers sit on the sidelines waiting for prices to fall. James Haffly, an Alexandria defense worker, would like to buy a house in the Washington area but thinks that prices are way too high and must come down substantially.”
“‘Housing is out of reach for many folks here unless they have a rich relative,’ he said, noting that having a high-income, dual-earner family doesn’t suffice anymore to buy a typical ’starter’ home for about $400,000.”
“He’s hoping that the 1 million to 2 million foreclosures predicted nationwide this year will help to drive down prices to affordable levels.”
“‘I mean, here we are at $125,000 a year, and to buy a home on the low end means spending 40 percent of our take-home pay. Something ain’t right. I wouldn’t buy in this market, not with rent amounts at half or less of what a house payment would be,’ he said.”
The Washington Post. “The slump in home prices in the Washington region is deepening and spreading, according to data compiled for The Washington Post that shows that for the first time, every local county saw a decrease in prices for a significant period of last year.”
“The current slump is worse in counties far from the Beltway, such as Prince William, where prices fell 13 percent year over year. Prices have plunged in…Sterling, Manassas and Bowie. Those drops challenge the notion that a strong local economy would shield the region from the worst of the mortgage crisis.”
“Instead, the depression in housing prices across the region is deepening and accelerating, according to the data.”
“Kristin Cockrell and her husband put their red-brick, three-bedroom Sterling Park house up for sale in April 2006 for $425,000. Then $379,000. They kept cutting to $350,000, then $325,000. Now, the couple hopes the new $300,000 price will attract the buyers they need in order to sell and move closer to family in San Diego.”
“‘Watching the price fall right before your eyes, it’s hard,’ Kristin Cockrell said.”
“Numbers show downward patterns in neighborhoods characterized by long commutes and lots of newly constructed homes. For example, MRIS shows that prices fell 18 percent in December in Sterling Park, about 30 miles from the District in the 20164 Zip code, as a spike in foreclosures depressed prices there.”
“On one street, three houses were recently for sale. A few blocks away, there is a cul-de-sac with two for-sale signs. Two blocks over, homeowners took their place off the market after it languished; it is now for rent.”
“Fast-climbing prices transformed Sterling Park over the last seven years. Median home prices in the neighborhood…rose nearly 100 percent from $237,086 in 2001 to $468,496 in 2005 at the height of the market, according to a review of MRIS data conducted by a local real estate agent.”
“As of mid-December, 39 percent of houses for sale in Sterling Park and neighboring Sterling were either foreclosed on or being sold in a short sale, according to Danilo Bogdanovic, a Loudoun County real estate agent.”
“‘The only thing selling right now are foreclosures,’ said Bogdanovic.”
“As banks discount properties for sale or allow owners to sell them for less than their mortgage value..the median sales prices in the Sterling Park Zip code dropped from $365,000 in December 2006 to $298,000 a year later.”
“‘It used to be location, location, location. In this market it is price, price, price,’ said Rick Martindale, an agent in nearby Chantilly. Martindale recently lowered the price of a four-bedroom foreclosed house in Sterling Park from $330,000 to $250,000.”
“After 25 years in Sterling Park, Betty Skelton wants to move into a retirement community. But on her block, at least two other homes are for sale. ‘I saw another sign up. I don’t remember seeing the sign up before,’ she recently lamented.”
“After two months on the market, Skelton isn’t ready to budge from her $399,900 asking price. During the housing boom, similar houses were selling for $500,000, a price she acknowledges was inflated.”
“‘I am not going to be able to go down further than where I am,’ she said. ‘I don’t think I can give the house away.’”
The Times Dispatch from Virginia. “Chesterfield, Hanover and Henrico counties recorded the fewest number of building permits last year since Integra Realty Resources began tracking the numbers in 1992.”
“‘The market correction that began in 2006 is definitely continuing,’ said Tom Tyler, senior analyst with Integra Realty in the local office in Glen Allen. ‘Once we get the fourth-quarter figures in, we may very well see another drop. This correction will probably continue well into 2008.’”
“Christine Chmura of Chmura Economics & Analytics in Richmond said she expects construction starts in the country, state and or region to continue to fall this year.”
“In the Richmond metro area, building permits for single-family houses are down 42 percent since peaking in January 2007, she said. By comparison, in the 1990 recession, permits in the Richmond area fell 40 percent.”
“‘A similar trend is occurring in the state, where permits are down 49 percent from their peak, compared with a 52 percent decline in the 1990 recession,’ Chmura said.”
“Some areas of the state are slower than others, such as Fredericksburg and Culpeper, said Rich Napier, past president of the Home Builders Association of Virginia. ‘Hopefully, we can move forward, wave the flag and people will buy homes. You’ve got be optimistic when you are in this business,’ he said.”
The Daily Progress from Virginia. “With more than 600 residential units slated to be built over the next two years in downtown Charlottesville, some developers and city planners are predicting that the combination of the flagging economy and the amount of competition will precipitate the downfall of a few of these high-rise projects.”
“All of the projects are set to be finished within an 18-month span, leading some to question whether the downtown market can absorb more than 600 condos at once. ‘I think that a number of those projects that have been approved probably will never get built,’ said John Matthews, a local architect.”
“Only one of the towers - the 57-unit Waterhouse on Water Street - has broken ground. And that was no easy task, said Bill Atwood, Waterhouse’s architect and developer. It took time to pre-sell nearly 50 percent of Waterhouse’s units - the magic number bankers and developers look to lock up before they move forward.”
“‘The credit market is so bad and the banking business has gotten so tight that it is extremely difficult to get a project started,’ Atwood said.”
“‘Are we going to go full-bore ahead without any pre-sales or testing the water? No,’ said Bob Englander, the developer of the site on the corner of West Main and McIntire.”
“Englander’s plans are still being molded. This summer when he received a zoning change by the city, he announced that he was going to put 79 units in the nine-story tower. Now, though, he says the building could have as few as 50.”
“He’s confident that construction can begin by the end of this year but acknowledges there are no guarantees. ‘We have one foot on the accelerator, one hand on the gear shift and the other foot on the brake as well,’ Englander said.”
Skelton isn’t going to “give it away” for $400,000 in Sterling Park (ack), and Haffly isn’t going to buy it.
Hardest hit is Prince William County, but the Washington Post deftly left out the real reason. And I suspect it’s not transportation. It’s fear of living in the neighborhoods.
These are new listings this month:
9419 LAFAYETTE AVE, MANASSAS, VA 20109
List Price: $164,900, Prior Sale: $442,000 7/22/2005
Listing Date: 01/14/08
-62.7%
8168 COMMUNITY DR, MANASSAS, VA 20109
List Price: $105,000, Prior Sale: $270,000 10/7/2005
Listing Date: 01/14/08
-61.1%
8004 COMMUNITY DR, MANASSAS, VA 20109
List Price: $119,900, Prior Sale: $282,900 6/20/2006
Listing Date: 01/16/08
-57.6%
Wow huge haircut!
Regarding Pittsburgh(and other such locations), so you think prices in 2010 could be equal to 1990 prices? Because 1998 prices weren’t much lower than 2008 prices. Your saying desirable locations will be around 1998 prices while rust belt locations will revert back to 1990 prices? If so, I should buy the cheapest livable house then.
The timing of the bubble varied by location. If you buy within historical norms/ratios you should do ok for the long haul. Wait it out and you may get a better deal than that. One of the magazines showed how much housing must fall to go back to historical ratios. I think it may have been Money magazine a few months ago. I have not confirmed whether I agree with their data, but it may be useful.
More than ever, “location, location, location” is going to matter, because if there are no “jobs, jobs, jobs” or standing wealth in the area then the house is essentially worthless.
The rust belt and northeast cannot avoid one inescapable fact - their economic base and populations are fleeing. Take Detroit where former mansions can’t be given away. Might as well be in Antarctica.
I see mansions in Detroit and asking price is half million at least.
Theres plenty of locations with overpriced houses and few jobs, if people think Pittsburgh is overpriced, theres similar locations where houses are $300k+
Bye…
Perhaps you didn’t see the link on the other thread that had 5 bedroom houses in Detroit for $11k, in a historic area?
Living in Prince William isn’t that bad, and I definitely don’t fear it.
The real reason may well be that immigrants, legal and illegal both are fleeing this area now that the construction boom has ended.
Across from my parents house (also in Prince William) a Hispanic man and his team of rehabers have finished work on the house. It’s been on the market for about three months now. It sits vacant, with someone coming around every few days to spend a night. It’s priced at $449,000. It’s a 4/3 with nothing else much special.
The owner and his crew are gone… so too are a lot of the other families. Vacant houses are getting easier and easier to spot.
Good point, xpovos. The big exodus.
‘We have one foot on the accelerator, one hand on the gear shift and the other foot on the brake as well,’ Englander said.”
Note to self: Don’t go into business or ride with Mr. Englander.
No, it’s never price, price, price. It’s affordability, affordability, affordability.
Price alone ignores property taxes trends, insurance trends, interest rates, and future income trends.
Price just considers a portion of affordability.
And it’s still location, location, location. Price means nothing if you’re looking in the east side of most cities.
The east side of Tucson is pretty nice. That is, except for the area just north of the Air Force base.
every city I’ve lived in or near has a much nicer East side than West side - Cincinnati, Dayton, Syracuse, Cleveland, etc.
LA?
Cleveland?
East Boston?
Youngstown is the opposite. West side is the middle class and east side is the bad side.
Another judge of values of houses in urban settings is hilly areas above the hoi polloi, which are often the most expensive…
West side of Columbus is the nice side. KC and Saint Louis, too. I think it was because the prevailing winds blew the stink from west to east.
It still is price. Any location will sell at the right price, whether it’s $500k or $5k.
east coast wind is from the nw so the stink blows to the SE from the old packing houses
I think “inventory” is the key driver these days - and the Washington experience, with close-in suburbs with less new inventory coming on line doing better than outlying regions, bears that out.
More inventory puts buyers in control, and makes sellers desperate. Prices aren’t going to stop at “affordable” if there is still available inventory and highly-motivated sellers - they will continue down below what conventional measures of affordability imply.
Of course - that’s good news for non homeowners on an individual basis - but I suspect not good for the economy and society on the whole. Strange days ahead.
I would be thinking of inventory more as an effect than a cause. The marketing of housing as “investments” led to the acceptance of bloated prices (far above rent-equivalent values), thence to remarkable overbuilding wherever there was room. Agree with you that prices will overshoot on the downside unless someone decides to bulldoze.
“After two months on the market, Skelton isn’t ready to budge from her $399,900 asking price. During the housing boom, similar houses were selling for $500,000, a price she acknowledges was inflated.”
Two other homes on her block are for sale. One of those homesellers is going to be smart enough to undercut Betty and the other seller(s). (who knows, maybe more to come this spring…)
I saw this happen to a friend of mine last year. She was saved by an out-of-town buyer after they had to cut their asking price by 15%.
I live about 8 miles from Sterling. These neighborhoods are for the most part run-down, unkempt older houses that aren’t worth $170K. Plenty of neighbors with 4 to 8 cars in the drive and on the street. If this lady has been there 25 years, then it was bought $75K. Unless she has taken out the “false” equity that “appeared” the last 4 years then she could sell it at a much lower price than $400k. If she was counting on the sale to fund her retirement, then that was/is a foolish notion.
You couldn’t pay me to live in one of those houses. She will be there a long, long time.
They went stag…
“The equity that she and her husband have in their Ellicott City home has steadily declined, while expenses have risen.”
So don’t do it then. Who says you have to buy a home??
So don’t do it then. Who says you have to buy a home??
I’ll bite. Yes I have been renting since 1998. I have wanted to buy my own home since about 2002 but I knew where this market was going, so I have sat it out. Each time I rent a new place I always get gung-ho and start cleaning gutters and pulling weeds. Then after a couple months I realize this is someone else’s house, and I have no desire to do much work around it. I get to where I don’t care if I come in from the garage with my shoes on and the carpet may get dirty. I have owned a home before and it was a nice feeling I suppose. One thing about being a renter is if something rubs me wrong I can easliy move.
I’ve been renting since 1999. Now I have a sweetheart deal with my landlord–she has not raised the rent since I moved in. Renting in zip 22206 for $1025 a month for a 2BR, 2BA 2-level apartment has left me in a good position to buy when the D.C. RE market reaches sanity.
But in the meantime, I have taken care of the apartment for my landlord. While my landlord picks up the costs, I have installed a new dishwasher, rebuilt the electric hot water heater, repaired the dryer, rebuilt both toilets, and recauked/repainted one of the bathrooms.
I look at rental repair this way: I am learning valuable skills that I can transfer to my own property someday, but I am learning them on someone else’s dime. None of these repairs has cost me anything but a little time. If I really screw up–and I haven’t so far–I can always call a repairman to come in and clean up my mistakes.
None of any home repair is difficult for me, and it does significantly improve the temporary home I am in, so what’s the harm? Beats watching cable TV and sitting on my rear.
Preach it, Posh! When I last rented, I was lucky enough to have a handywoman as a landlady. I learned a lot about home maintenance and repair from watching her and pitching in to help. She also taught me a lot about horticulture and gardening. Boy, has that been good to know!
good observations about learning residential repairs while renting: I had the same exerience when I last ended up in a semi-ghetto apt complex that started out nice but went downhill thru neglect.
When it came to little things, like changing an oven bulb or burned out switch, I figured the overworked maint crew would be glad to have a tenant help out in a non-hazardous repair. They were! I even installed an overhead light for the kids room wired to the wall switch. All to code.
When we moved out 4 years later I was nervous about the changes but had bigger things occupying my time, and was happily stunned to get a full deposit refund w. a note thanking me for the “excellent care of premises”.
(I’ll never forget paying an A/C tech to recharge the freon in the “new” leaking compressor installed a few months earlier … the bill was over $250, which I paid in cash(later reinmburesed)& was happy to do it in the 100+ degree heatwave that monh.
Quite a few slackers were outside on the steps whining about no A/C, no money, etc etc … while smoking $5.00/ pack cigarettes & drinking a case of beer. So happy, to finally get away from THAT declining complex …. yeah, I EARNED my ” bitter renter stripes .. hehe) !!
…a semi-ghetto apt complex that started out nice but went downhill thru neglect.
Sounds all too familiar.
Yep, I’ve learned about maintenance while renting as well: caulking, painting, etc. The local maintenance people are, for the most part, clueless, which means that their “solutions” to problems were often worse than the problems themselves. Some of them did a good job, but those people were usually overbooked and would have to spend time undoing the damage done by their less-skilled coworkers.
And, like everywhere else, most of the complex is full of riff-raff that likes to trash the place, live like slobs, etc. A sign of the times, coming soon to once-nice neighborhoods near you.
You were too careful. I missed the start but bought a beachfront condo (2nd home) for $439000. The first sale 11 months earlier was $369000. I sold 12/06 missing the top. I got $1050000. after watching the same condo in the same building sell for $1169000. in 4/06. Oh well, I did really great. My point is you cant wait for the “perfect” time to do anything. “Life is like a box of chocolates” if you know what I mean.
By the way, I simply don’t buy that a “low end” home is 40% of take home pay for someone making $125k (and, even if it was, that means it’s probably just under 30% of gross income, which is well within historical guidelines). We make slightly more than that and our house is in the “starter home” range mentioned in the article, and our nut (mortgage, taxes, insurance) is 27% of our take home pay. And that doesn’t even take into account that we get several hundred back via the mortgage interest deduction.
Shitty one-level brick ramblers in dubious neighborhoods were going for $450K
That’s exactly right. I don’t know NOVA, but in metro-accessible suburban MD, $400-500K was standard for extremely basic single family homes in iffy neighborhoods.
Yep, that is correct, and even in northern Maryland, away from DC, $300K was for a long time the entry point for old, post-War ranchers in blue-collar neighborhoods. Note that the neighborhoods were not neccessarily bad (though some were), but they were all old and kinda cramped. Oh, and the median household income of the areas in question was only $50K. Yeah, that price to income ratio will work long-term - NOT!
Could be worse: in Glen Burnie they built a condo development where the basement condos sold for almost as much as post-war Ranchers just up the road?! Ah, but the condo development had some special nearby features: an adult video store, lots of coin-operated laundray mats, and a few other shady-run down businesses. Great!
I’m not sure where you’re living in Northern VA but a detached single family home in good condition in a desireable location (i.e. NOT Prince William or Sterling, etc.) will cost you a minimum of 400k. This guy is right on and he is smart for not buying.
Our nut on a $411k house with a 10% downpayment is $2500 ($2050 first, $250 second, $125 taxes, $75 insurance). Our monthly takehome pay on a combined income of $153k is $9100.
That means that the takehome pay on a salary of $125k would be about $7550. The total mortgage nut would be less than 33% (I get 32.3%) — not the 40%+ he claims. Either they don’t make $125k, the houses they want are much more than the “starter” homes, they have crappy credit, or they have nothing for a down payment (and if the latter two are it, then *that’s* the problem, not the “crazy market where the upper middle class can’t afford anything”).
Not saying he’s dumb for not buying, just that the numbers don’t add up.
That guy is in Alexandria. Alexandria’s a big place, but up until recently, I don’t know that there would be any single family homes at 411K in good Alexandria. A year or two ago, I went to an open house for an under 400K house near Braddock metro and discovered that not only was it near the metro, the only front yard view was the protective wall of the metro. And the neighborhood was a bit rough. Several blocks away, a flippered up two-bedroom duplex (just half) was on sale for 650K. Likewise, one-bedroom condos were on sale for 400k. So, I’d believe this guy when he says that it would be 40% of take-home.
maybe the guy pays child support….. after that its 40%..wouldn’t be the first guy
Um, I gross pretty near this guy and I can see where his numbers do add up. Factor in cost of health care (rising contrib. from employee,) taxes, retirement plan contrib., union deduction, deferred comp. @ 10 -15% of gross, soc sec., medi, etc. and whoosh it’s gone.
How is your tax only $125? For a $411k house in NoVA, it should be at least $300 (0.09% tax rate for Fairfax).
And, I agree with Amy P: there are no SFH in Alexandria that I would ever consider living. Perhaps in another year (or two or three), but right now they are rinky-dinky and pretty rough. Really, for the past 3 years, until this past summer/fall, the only thing you could buy for $400k that would have been worth a damn would have been a townhouse in Loudoun.
I love the characterization of “buyers strike” Like its the buyers fault or something. Yeah, thats it. Its those damm buyers trying to rip everyone off. The nerve. Lets exhume Regan so he can fire all those malcontent buyers.
I have feeling history will treat Reagan exactly opposite of how it treated Truman…
Maybe the government “stimulus package” can be a free house for everyone with guaranteed appreciation ever year! Free money for all! Wait - what’s that? Why is the dollar now worthless? Quite a conundrum!
I sure hope these declines come to Potomac, Bethesda, Rockville - I need a house.
What I’m wondering is, what did her and her hubby initially pay for it?
10/28/2002 Sale Price: $233,000
http://www.franklymls.com/LO6588764.html
Well boo friggin hoo!!! Let me get this. 233k paid in 02 somehow entitles you to a 67k profit while living in the shack for 5 and a half years at no cost?
Get a grip.
At a generous 5% appreciation per year, that 233K is worth about +/- 300K. Assuming of course the initial price wasn’t 2X it’s fair historic value. It’s taken them 2 years to get to a price point that’s probably still highly inflated. Tough days ahead.
I have been through her neighborhood. If they paid 233K for that in 2002, they overpaid by at least $60K. These houses are not desireable, in an unkempt area with neighbors who have 4 to 6 cars in the drive and at the curb. They aren’t in reality. Not at all.
$233K?
If the house manages to sell for $300K, then they still pocket a decent amount of cash. At least they’d get a small amount of profit. The one other thing I would do differently is NOT to return to CA. Not worth the trouble.
I say we close the CA border, myself…
“$233K?
If the house manages to sell for $300K, then they still pocket a decent amount of cash. At least they’d get a small amount of profit. The one other thing I would do differently is NOT to return to CA. Not worth the trouble. ”
You don’t understand, she needs to make a $166,000 profit so she can buy an overpriced crapshack in California! Damn those meanyhead buyers who don’t want to give this poor, deserving woman a huge, unearned profit! Don’t they know it’s their duty to pay for her next house?
Note that the Washington Post cited Case-Shiller. Other articles linked here are citing Dataquick and others.
Anyone but the NAR.
Looks like the housing bubble and bust has caused a massive loss of credibility. In effect, goodwill was cashed in for short term profit, and has since evaporated.
Assuming that the real estate market isn’t going to disappear, there will probably be opportunties for new entrants to do what Buffett is doing in municipal bond insurance — swoop in and replace the former players.
The marketing motto: “We weren’t one of those lying, scheming scumbags who screwed you.”
Anyone but the NAR.
Not only have they lost crediblity in the market, but they are also risking losing their not for profit status based on their actions.
“Fast-climbing prices transformed Sterling Park over the last seven years. Median home prices in the neighborhood…rose nearly 100 percent from $237,086 in 2001 to $468,496 in 2005 at the height of the market, according to a review of MRIS data conducted by a local real estate agent.”
Yeah credibility. By my calculations $468k is a 200% rise from $237k. Am I figuring wrong? No wonder no one believes the NAR.
Yeah credibility. By my calculations $468k is a 200% rise from $237k. Am I figuring wrong? No wonder no one believes the NAR
Seriously?
Ghosty, the rise from $237k to $468k is almost 100%.
The price of $468k is almost 200% of $237k.
If it falls from $468k to $237k, it will fall by almost 50%.
Simple, isn’t it?
Note that the Washington Post article is from the Business section and that is why they cite Case Shiller. Anything that comes out of the supposedly “indpendent” real estate section reads like an NAR press release.
“After 25 years in Sterling Park, Betty Skelton wants to move into a retirement community. But on her block, at least two other homes are for sale. ‘I saw another sign up. I don’t remember seeing the sign up before,’ she recently lamented.”
“After two months on the market, Skelton isn’t ready to budge from her $399,900 asking price. During the housing boom, similar houses were selling for $500,000, a price she acknowledges was inflated.”
“‘I am not going to be able to go down further than where I am,’ she said. ‘I don’t think I can give the house away.’”
Hey, Betty. I guess your home will be your ‘retirement’ home. I am sure you paid something like $20K for that POS in 1982? So less than $399K wouldn’t be giving it away. I am not sure, but it seemed you have HELOCed to 399K to finance some lavish lifestyle above whatever your income was for the last several years. Just can’t admit that to whomever was interviewing you. I have two tears in a bucket waiting for you. WAWAWAWA.
sterling park is 50% illegals -try 299 w a free pinjata party
the 57-unit Waterhouse on Water Street - has broken ground. And that was no easy task, said Bill Atwood, Waterhouse’s architect and developer. It took time to pre-sell nearly 50 percent of Waterhouse’s units
Aptly named for the bath they are going to take.
“‘I am not going to be able to go down further than where I am,’ she said. ‘I don’t think I can give the house away.’”
———-
Give it away, have it taken away - what’s the difference?
After 25 years in Sterling Park, Betty Skelton wants to move into a retirement community. But on her block, at least two other homes are for sale. “I saw another sign up. I don’t remember seeing the sign up before,” she recently lamented.
After two months on the market, Skelton isn’t ready to budge from her $399,900 asking price. During the housing boom, similar houses were selling for $500,000, a price she acknowledges was inflated. “I am not going to be able to go down further than where I am,” she said. “I don’t think I can give the house away.”
Median home prices in the neighborhood of construction workers, nurses and mechanics rose nearly 100 percent from $237,086 in 2001 to $468,496 in 2005
(1) Stupid woman. “Giving it away” means getting ZERO.
(2) Whiney cow wants to make money and is wailing about not getting a bigger profit.
(Rate of inflation per year X 6 years) + 237,000 is the reasonable value. The price would then be $276,000. That is how much the consumer price index has gone up.
It is not worth more than $276,000. And this greedy fool wants another $123,000 or nearly 50% more.
I’m feeling very cranky with idiots this morning.
Don’t take it so personal. May Betty and her home rot as one.
Better to take it out on her than yell at my dogs.
Bad week around here. A very dear friend was killed snowmobiling on Sunday. And no - alcohol was not involved. He was the music director for the Catholic diocese, had just finished playing at Mass, went home, changed and went out with the snowmobile with a group. There was a solid chunk of ice-snow about 3 ft high and 6 ft wide in marked snowmobile trail and not visible with the blowing snow- another just missed it and he slammed in to it.
SO I’m taking it out on fools like this woman rather than yelling at the dogs for barking or the cats for doing cat-things.
Sorry to hear about your friend.
I just love these “Don’t Budge Betty’s”.
Just hold your ground, close your eyes and stay firm BETWEEN the railroad tracks and you WON’T feel a thing Sweetheart
Looks like Betty and her husband paid a big 82,900 for their slice of paradise and the current tax assessed value is 165,700. Now, since I could find this in 3 minutes from the WaPo’s own website, I’m sure the reporter could do the same. I sure would like to ask Betty why she thinks taking 399,900 would be so horrible and “giving her house” away.
Ann: keep in mind that the 2002 prices were already inflated by 20% or so. So, it’s not worth more than $237k today (2002 price).
“Give it away, have it taken away - what’s the difference?”
If it’s taken away they can blame somebody. Maybe even sue them, if there’s a lawyer in spitting distance. “Taken away” removes the blame from them for their inability to make the correct decision and transfers it to somebody else.
So, I’m in Charlottesville, and we are somewhat buffered by UVA; however, our bubble runup was well under way by 2004 for that same reason. Local foreclosures are just now really starting to pick up - predictably in the more ‘affordable’ further-out surrounding counties and subdivisions. We already have a condo glut, but not in the ’boutique zone’ where these building projects are proposed. However, these fools will be saved from themselves by the newly-re-discovered caution of the banks. The same Mr. Kuttner recently finished a downtown condo project he only just barely unloaded before the bubble burst, and a number of underwater buyers there are currently struggling to try to sell.
Was checking C’ville craigslist the other day. Cheapest listing was a dolled up garage on Cream St. - 760 sq ft listed at $189,9 and currently renting for $850. Tenant loves it, will stay! screamed the copy.
For yucks I emailed her - hey, I said, after taxes, maintenance, and insurance you might net 1% IF prices don’t fall. She emailed back that I basically didn’t know what I was talking about, that it had appraised for 200, that one just like it sold for over 200, this isn’t California or Florida, yadda, yadda. . .
Looks like Hookville is still a little on the pricey side.
You should have emailed her back…man i would love to get CHEAP RENT like that too….but at your selling price i would have to raise it to $1300+ a month…and kick out your tenant…
See what her answer would be then.
“‘I am not going to be able to go down further than where I am,’ she said. ‘I don’t think I can give the house away.’”
I need one of these quotes each morning with my Cheerios and coffee to get my day started!
“‘We have a lifelong financial savings plan crisis in this country today,’ said Joseph DeMattos Jr., the Maryland AARP director, adding that there needs to be some sort of bipartisan political intervention to stimulate a savings spree.”
People don’t save because the government penalizes them for saving. Last week the gov reported that inflation was 4.1% last year. Yesterday they cut rates to 3.5%. That doesn’t encourage savings.
See what happens when tried and true pension plans are canned in lieu of Wall street engineered 401k crap?
Remember during the dotcom boom…when people were seriously suggesting that the Government solve the Social Security crisis by “putting the money in index funds.”
We can all list a dozen reasons why that’s idiotic. But elected reps were seriously proposing this! Interestingly, I don’t recall hearing my elected reps suggest we solve the Social Security problem by putting the money into Condo-tels and Vegas McMansions. That means that at some level they knew it was a scam.
Wait until they means test Social Security and Medicare, making those who saved no better off than those who splurged.
Means testing won’t be dollar for dollar. Probably lose $.10-.25 for each dollar of other income.
So, you will be better off, just not as “better off” as should be.
On the flip side, we could just shut it down. Social Security , in its current form, is insolvant. Something drastic has to be done.
“Something drastic has to be done.”
Something drastic is being done at this very moment: The economy is deflating and this deflation will force people to work longer at their jobs and thus keep paying into the SS system.
See? It’s all good.
RIGHT ON THE MONEY AGAIN WT !!!…..I would bet the ranch that means testing for the entitlement programs will be upon us in two years….
YOu will have more than a little problem pulling that garbage on Medicare.
Pirvate insurers will NOT sell non-group policies to the elderly.
They won’t do it now - and they wouldn’t do it in the 1940s or 1950s. That is why Medicare was created.
Hell, I’ll do it. You just have to let me charge enough to cover my expenses.
This is one of my biggest fears: That in the end the savers will be just as well off as the debtors because SS and more important Medicare will be means-tested.
The only winners will be people who saved money outside the system. I can’t blame folks for doing that.
The savings plan I have is 401(k). I put money in, and don’t have to pay the 44% tax this year. Instead I will get to pay the higher tax rate we will have when I take it out 30+ years from now.
Unfortunatly, my 401(k) has VERY few investment options.
Unfortunatly, my 401(k) has VERY few investment options ??
Thats kinda why I never went into one…I just stayed with what I knew….
Where else can you “make” 20% or more right off the top???
If you have traditional IRAs and your income is high, in 2010 and 2011 you can convert them to Roth IRAs after paying taxes on the gains. If you have pretax 401ks outside your current company, you can convert them to traditional IRAs, then in 2010 pay tax on the contributions and gains as you convert them to Roths.
The $64,000 question is: Will taxes in 30 years be higher than now or will taxes be abolished? In the first case, conversion to Roths would be a good idea. In the latter case, a terrible idea.
“People don’t save” — well, they mistook house-buying for a form of “saving.” It seemed safer than stock purchases. Either way, though, a problem arises when all the “savers” try to cash out at one time. There’s the real catch-22 of the baby boom retirement idea. If they had all “saved,” who would now provide goods and services? (I know, I know, illegal aliens. Good luck with getting the immigrants to suck up fewer services than they deliver.)
People don’t save because the government penalizes them for saving. Last week the gov reported that inflation was 4.1% last year. Yesterday they cut rates to 3.5%. That doesn’t encourage savings.
You got that right. If mortgage yourself into a hole you can deduct the interest, but if you save you get to pay taxes on the interest. That’s a sure savings killer right there.
Well, gee, now that’s a real humdinger - why aren’t people saving?
- Couldn’t have anything to do with declining real wages and outsourcing or insourcing all of our jobs, could it? The fact that people can’t afford to save has nothing to do with the problem at all, right?
- It also couldn’t have anything to do with the consumer culture that brainwashes people into buying stuff they don’t need with money they don’t have to impress people they don’t like, right?
- I am sure that the corporate corruption that has made nearly all investments unsafe isn’t part of the problem either.
- Oh, and then there are the safe investments, like CD’s, that return less than the rate of inflation. Yep, that’s not a problem either.
Yep, a real head-scratcher this one is!
“Half of working families do not put anything away for retirement, and those who do have average savings of just $35,000.”
And where is most of that $35,000? Uninsured and workin’ for the boyz.
“…adding that there needs to be some sort of bipartisan political intervention to stimulate a savings spree.”
when 70% of a nations GDP is consuming…ain’t gonna happen. your government does not want you to save. they want you to have to work until you die. they want you to be a debt slave. they want everyone to have to live paycheck to paycheck able only to make the minimum payment forever.
long live george w. bush.
Oh yea. A supply siders vision of utopia. 90% of the population serving 10% while the 10% abscond with 90% of the wealth.
We’re not far from that.
Savings is a form of independence and freedom, and the clowns in charge NEVER want the commoners to have that.
This went on long before W showed up. Yet he gets blamed……what a shock!!!
Yup…ole W never did a THING wrong since he Saw the Light …at the end of his Jim Beam BOTTLE
Except that this trend has accelerated markedly under ole GW. From NY Times 29 March 2007:
“Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.
The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression.”
your government does not want you to save. they want you to have to work until you die. they want you to be a debt slave. they want everyone to have to live paycheck to paycheck able only to make the minimum payment forever.
Bull. Your government wants to create jobs. An unemployed population is a discontent population. It has nothing to do with saving or consuming.
If you are too dense to see that entrepreneurship is the path to wealth and that the vast majority of “wage-earners” are lazy, risk averse sheep, than the government certainly isn’t going to educate you.
No one is stopping you from starting your own business, creating your own income stream, your own job security. You expect someone else to do that for you and still pay you well or you want the government to support you now and in retirement, as if the government owes you anything. Sorry, bub. That isn’t going to happen.
If I had a gripe with society today, it isn’t that we are morally corrupt, greedy, short-sighted, etc. It’s that we celebrate mediocrity and fear failure. One doesn’t learn and grow by getting an award or praise for coming in second. How will we learn to succeed if we never feel failure?
Sorry for the rant today, but that set off a nerve… working on a startup while holding down a full-time job and a family strains the nerves, especially when I hear whining from the sheep…
Being an entrepreneur CAN be a path to wealth. But it’s not a sure thing. Nothing is.
As for working on a startup while working a FT job, I’ve been there. Wasn’t fun. So, I can certainly relate to your frayed nerves.
However, don’t lump all employees into the lazy, risk averse category. Employees come in all shapes, sizes, and levels of risk tolerance and work ethic.
For all you aspiring entrepreneurs, a good book to read is “Never Bet the Farm” which promotes prudence over flashy risk-taking. Goes against the grain by saying you need to plan for failure, which actually improves your odds of succeeding.
Being an entrepreneur CAN be a path to wealth. But it’s not a sure thing. Nothing is.
Slim, I agree with this statement… nothing is certain. However, my point is that people today expect to hit it big on their first try. They fear being labeled a failure. They fear making mistakes. The best lessons I’ve learned in life came from my own mistakes, not from my successes. Parents today can’t even let their children go on interviews by themselves for fear they will screw it up…
don’t lump all employees into the lazy, risk averse category. Employees come in all shapes, sizes, and levels of risk tolerance and work ethic.
Maybe I was too harsh when I said the sheep were lazy… but that is how I think of them. I work a 9 hour day, then go home and work on the myriad of tasks related to the startup, whether it be coding, UI development, etc. Somewhere in there I spend some time with the family or get some exercise or whatever… I don’t go to sleep before midnight, often later, than get up and do it again. I don’t say this to brag, just to show the difference between the wolf and the sheep. The wolf is stalking while the sheep sleep…
The sheep go home after work, watch TV, then go to bed. The work ethic while at work may be ok, but then they turn off once their shift is done. I have employees working for me (at my day job) who have no desire to expand their skills and further their career unless the company is willing to pay for it. This is in IT… I have to laugh at them. If they don’t have the motivation to grow on their own, the company certainly won’t do it for them, but that is the answer I get time and again. My employer should pay for that training… my employer should pay for my schooling… the government should pay for my retirement… the buyer of my overpriced house should pay for my retirement/HELOC’d spending sprees. See where I’m going with this? No personal responsibility. Lots of entitlement.
Again, sorry for the off-topic rant, but I’m disgusted with the sense of entitlement I see everywhere. To quote the movie Boiler Room, “Nobody wants to work for it anymore. There’s no honor in taking that after school job at Mickey Dee’s, honor’s in the dollar, kid.”
There’s a difference between wanting to better one’s self and being willing to be a slave to one’s job. Just because one isn’t willing to put in 12-hours a day, 7 days a week juggling multiple jobs, being on call all the time, etc. doesn’t mean that one is lazy or that one should be punished.
Also, of course people fear failure: failure is held over people’s heads in this society, while success is ignored. Do a good job at work? “That’s your job - don’t expect anything for it!” or somebody else steals credit. Screw up? It’ll be held against you for as long as possible. People are going to naturally be very risk-adverse in a society that does not reward success, but instead rewards greed, stupidity, and feral cunning as opposed to honesty and integrity. And in an era of endless layoffs, outsourcing, insourcing, etc. most people wisely feel that it is better to keep their head down and keep on rowing the slaveship than to stand up, speak out, and be tossed overboard. Many of them have families to feed as well, and a desire to better one’s self is nice, but these days that will not put food on the table.
You hit it out of the park.
working on a startup while holding down a full-time job and a family strains the nerves, especially when I hear whining from the sheep…
An there’s your reason why more people aren’t entrepreneurs.
“It has nothing to do with saving or consuming”.
…yet that was the point of my post. you can’t save nor consume without a job whether it be a lazy wage earner or self-employed.
i do quite well as a lazy wager earner btw.
It may seem as if it was directed at you, but my rant was just that, a rant. It wasn’t a personal attack on you, Michael. After rereading the post, I realize it may seem as if I called you dense… meant that for the sheeple. Most on this site don’t apply, even if they are “wage earners” as they didn’t take it for granted that housing always goes up or that real estate, especially single family home ownership, was a path to wealth and easy retirement.
Intentional or not, your swipe at “laxy wage-earners” smacks of Casey Serin (anyone recall his snide digs at “W-2ers”?).
If anything, the exact OPPOSITE is true: the wage earners are the ones doing all the hard, dirty work that needs to get done to put food on the table and keep the lights on in this country.
Yout typical self-described “entrepeneur” today tends to be the lazy, fast-buck con artists that want money for nothing. They are the ones selling NINJAs to stupid, gullible people, and creating “innovative” financial products on Wall Street, then rewarding themselves handsomely for this brilliant creativity. I know there’s another category of “entrepeneur”: the old-fashioned, work at your day job while starting a business out of your garage type, but that kind hasn’t existed in this country for a generation at least.
” How will we learn to succeed if we never feel failure?”
I dunno. George Bush ran every business his father’s friends gave him into the ground. Has done the same with the country. He’s failed plenty. Big time. More than most employees could ever dream of failing.
Are you still expecting him to succeed?
I run my own business and routinely work 70-80 hours a week. BFD. I like what I do and I make a good living. I’m surrounded by folks who work the same hours and more.
Some employees, some self-employed, some business owners. Hard work and long hours have never gone out of style.
People who are working for a living aren’t “sheep”. They’re working for a living.
George Bush ran every business his father’s friends gave him into the ground. Has done the same with the country. He’s failed plenty.
Obviously you still don’t get it… what has he learned from his failure? Who has called him on all those failures. Like I said, our society today can’t stand the thought of telling someone who made a mistake that they made a mistake. They’d rather say “Good job, you did your best in a difficult situation”.
People who are working for a living aren’t “sheep”. They’re working for a living.
They are indeed sheep, if they expect their employer or the government to take care of them. If they expect to have a job until they retire and continue to receive increased wages for no other reason then showing up. Free trade and globalization, like it or not, means labor is competing on a global scale. You don’t like it, get over it and figure out how to compete and innovate.
That’s fresh: calling (all) people who work for a living “sheep”. Funny, but I’m “one of those” people, and I not only don’t expect my employer or the government to take care of me, I fully expect SS and Medicare to be insolvent. Which is why I’m investing & saving like crazy right now, while I’m still young.
RE: starting a business, if I happen to think of something with good potential, yes, I’d like to start one. But unless you want to fail quickly (as most new start-ups do) starting one takes time, careful research and investment capital. It’s not like you just show up to the CEO of Starbucks and say, “I’m ready to go –gimme my free coffee shop! Oh, and make it a good neighborhood too!”.
RE: “trade and globalization”, why is it that Free Market Fundamentalists always insist that LABOR has to compete 1-to-1 with the entire Thirld World, while MANAGEMENT gets to compete with each other –to see who gets the biggest bonus and compensation package? Seems a bit of a double standard to me.
Lazy wage earners are cool.
“‘Watching the price fall right before your eyes, it’s hard,’ Kristin Cockrell said.”
I can empathize, watching the prices going up was just as hard.
waiting for them to fall can be pretty hard, too, for those of us in tax brackets that are conducive to “ownership”
All is not lost with these big, wonderful, empty, overpriced houses and condos lanquishing on America’s RE Markets.
We could ask the DebtOwners and Banks to place Holiday twinkle lights on ALL of their Debt Towers, have them Flip the switches ONE day each year and we could briefly worship them.
THIS would do Wonders for their “Pride of Ownship” Syndromes and their rotting on the lot shacks would serve some higher purpose:)
Oh!…We HAVE Christmas in America..a..an..and it’s OVER already ???
How about on AFTER the Superbowl ????
“After two months on the market, Skelton isn’t ready to budge from her $399,900 asking price. During the housing boom, similar houses were selling for $500,000, a price she acknowledges was inflated.”
“‘I am not going to be able to go down further than where I am,’ she said. ‘I don’t think I can give the house away.’”
So pricing the house at a reasonable level based on what people can reasonably afford is tantamount to giving the house away? Did the people that she bought from 25 years ago give it away to her?
Do you think this house has…
New Appliances
New Carpet
Energy Efficent Windows
New Paint etc.
I am betting not one penny has been put in to the place to even make an attempt tp market something at this price. In a gang ridden suburb no less…good luck.
Here we go again with more sob stories of old folks completely reliant on their house as their retirement. Whoever told them that this was the way to retirement riches is seriously flawed. Even so, I can’t tell you how many people I know who are doing exactly that. I know a woman out here in the East Bay who ‘bought out’ her brothers and sisters part of the homes her parents willed to them. She’s totally counting on this house as the majority provider for her retirement. Retire to what? Selling and moving somewhere less attractive? Less warm? I don’t know. Logic tells me that if you REALLY like an area and are willing to shell out half a mil for a small house in the Bay Area that you’d probably want to retire there as well.
Yeah, before 15 years ago, your house wasn’t your home AND you’re retirement, it was just your home and it was hopefully going to be paid off by age 60 so that when you retire and use your retirement money (not your home equity) you wouldn’t have a mortgage to deal with too. What a bunch of dumb-asses. Who was the jerk-off that said “If you have a paid off house, you haven’t managed your money well.” What an a$$hole.
I planned on selling my house when I retire and buying one somewhere else. I plan on spending whatever I get out of it to buy a new place. I didn’t plan on putting part of it away to live on. That’s what other retirement planning is for.
>>Who was the jerk-off that said “If you have a paid off house, you haven’t managed your money well.”
There’s a guy named Ric Edelman who has a financial show on a big nyc radio station.
Here’s one of his articles:
10 Great Reasons to Carry a Big, Long Mortgage
Never own your home outright. Instead, get a big 30-year mortgage, and never pay it off — regardless of your age and income.
http://www.ricedelman.com/cs/education/article?articleId=232
Better yet, rent for half the price and invest in something that will appreciate.
E-mortgage Solutions in the Baltimore area loved to tell people that paying off their house was a bad idea, and how debt is good, and so is leverage, and taking money out of their house to buy “stuff” or “investments” (like other houses) was a great idea, etc. And that’s why I want to see them go out of business - too bad they can’t be nailed for fraud.
I feel blessed that I grew up next door to my
Portuguese grandparents….Through their actions a learned frugality…Even though we lived in the city, they grew 80% of what they ate in the backyard…Only one car…They got married in their early twenties…Bought a house and remained in the same house until both of their deaths….68 years !!!!
Here we go again with more sob stories of old folks completely reliant on their house as their retirement. Whoever told them that this was the way to retirement riches is seriously flawed.
I never saw it in print in my mom’s personal finance text book, nor did I see it in personal finance publications such as Money. The old folks obviously did not do any research. Money magazine has been published for over 30 years, enough time for the doofuses to educate themselves about how to save for retirement.
Mr. Haffly is in much the same situation as my wife and I, even down to the income level and location. We live in Arlington (22202) and have no particular interest in devoting 40%+ of our income to the sort of cubbyhole or aging shack that we’d still be getting around here, even with the declines so far. I think we’ll wait awhile longer, thank you.
i check out the inventory in Arlington almost daily- new listings popping up all over and in all different price levels. it’s great. i’ll think we’ll be in really good shape in another year or so.
I vote for the “or so.” Prices in my 22202 neighborhood are ridiculous and have barely started to budge.
Here’s an example. This old house was given the most horrific-looking addition ever by a specuvestor a couple of years ago. I mean, it’s FUGLY! The house has been sitting vacant for well over two years and has never been lived in following the renovation. The first time it was listed, I recall it sitting at about $800k. It’s still sitting at $675k and has never gotten a single bite (I walk by it almost every day and have never seen a single showing or such). The realtor in this listing couldn’t even be bothered to mow the lawn for the picture. Folks, things are going to have to come down a lot more before I would consider buying in my neighborhood.
http://washingtonpost.2.homescape.com/SCS/listing_details.jsp?calling_page=listing_result_list&affiliate_name=washingtonpost&tab_num=1&geo_area_id=12968&listing_result_page=listing_result_list&community_sort_id=1201113113584&search_by_type=new_mls%2Cnew_class%2Cnew_const%2Cresale_mls%2Cresale_class%2Cresale%2Cresale_ecom_owner%2Cnew_ecom_owner%2Cresale_ecom_agent%2Cnew_ecom_agent%2Cresale_ecom_broker%2Cnew_ecom_broker%2Cresale_ecom_builder%2Cnew_ecom_builder&filter_property_type=single_family_home&display_default_state_id=67089&filter_product_id=27043357
Cripes, that looks ridiculous!
DC/NoVa Metro is just now starting to tank. Can’t wait till I can buy back in
Sold in ‘05 & just waitn’……
“With more than 600 residential units slated to be built over the next two years in downtown Charlottesville, some developers and city planners are predicting that the combination of the flagging economy and the amount of competition will precipitate the downfall of a few of these high-rise projects.”
This story is being repeated over and over again in many of our cities. All over Houston, Dallas, Austin, etc… there are high rise condos going up. In Austin, the average selling price of a downtown condo is $800K - which put them in the top 5% of asking prices for real estate. And there are thousands of them being built.
Hell - there are downtown condos being built in Waco! I guess if the Branch Davidians revive their numbers, they can move into one of these buildings.
If theres alot of high tech jobs, those high salaries will be keeping house prices from dropping much, at least the nicer houses in upper middle class suburbs.
Regarding rust belt houses being $20k before the bubble and $70k now, please give me links or tell me how to find this information. I am especially curious what Oil City cost before the bubble. One source said median house price was only about 20% lower in 1998 than 2008 so how is this possible?
Could prices fall to 1990 levels in those such locations? I do not want to catch a falling knife and need to be informed. I know it’s obvious how inflated prices became in Florida but it doesn’t look obvious in the more affordable locations.
“If theres alot of high tech jobs, those high salaries will be keeping house prices from dropping much, at least the nicer houses in upper middle class suburbs.”
I don’t agree. I’m one of those tech workers making a six figure income. So does my wife. Homes here in the Bay Area are now hovering around 600k for a modest house. I’d be comfortable with a 425k house MAX.Thus housing prices here have a good ways to fall. There are countless numbers of couples who make great salaries that are smart enough to know what’s up and what prices are more reasonable. Hence a 30% drop is what me and most of the people I know are waiting for. Otherwise, we’ll just move somewhere else and there will simply be less tech workers to buy homes period.
Lastly- don’t look at locations just for home prices. They’re cheaper because their economies suck, which in turn makes the cost of housing just as expensive as everywhere else. Unless you’re at retirement age, I’d be looking at other places that realistically will support you financially for however long you plan to work.
My above post was for Pittsburgh and the rust belt. Maybe you should relocate to Pittsburgh. In today’s bit bucket, several people discussed this topic and one guy said Pittsburgh is reviving with lots of high tech jobs comming. Another person thinks a $50k Pittsburgh suburb house will bottom out at $10k. You gotta check out that thread.
I am predicting as much as 75% drop in prices for the bay area, but I honestly don’t see more than 30% drop for Pittsburgh, although some disagree and say itll drop alot.
Another person thinks a $50k Pittsburgh suburb house will bottom out at $10k. You gotta check out that thread.
I don’t know what Burbs this person is talking about but it probably isn’t a good area. The up and coming areas are Moon & Robinson Twp and believe me those burbs are not cheap. A decent apartment complex there is around $700-800 for a small one BR. Taxes are thru the roof, and remember in PA if the schools need money you don’t vote on it, it’s assessed. Their school taxes are astronomical. I live in Ohio 10 miles from the border and people buy here and commute over there just to avoid the taxes. A comparable home over there has property taxes @ 2-2 1/2 times OH.
One source said median house price was only about 20% lower in 1998 than 2008 so how is this possible?
A lot of the rust belt has houses that only went up 1-2% a year, so that’s 10-20% in 10 years. The area I live in has never had large fluctuations up or down in wages, employment, housing or anything else. I wouldn’t expect 1990 prices, because this area just seems to plod along, not getting too excited about anything. House prices here are still in line with wages & I think that’s what will really cause prices to drop drastically in some areas. Average wage here is $33k and you can still find tons of houses in every price range from $50k-$1.5M. There’s no shortage of lower or mid priced housing.
confessional
I’m buying T,VZ cnaroys , some riets
I know we’re all gonna die ,but I want some div’s before I go
You mean riets or reits? If the latter - what would possess you?
Too early IMO to buy VZ and T - revenues and thus dividends will be shrinking for several years IMO.
For canroys - you’d better read this if you’re doing it for dividend purposes. They’ll be going down a lot soon.
http://www.dividenddetective.com/canadian_royalty_trusts.htm
(Or was your post all tongue-in-cheek, and I just got hooked?)
aarp= old commies
Maryland AARP director, adding that there needs to be some sort of bipartisan political intervention to stimulate a savings spree.”
gov is supposed to “save” for you
Dobbs - Our leaders have squandered our wealth:
http://www.cnn.com/2008/US/01/22/Dobbs.January23/index.html?iref=mpstoryview
Why wont Lou Dobbs talk about how CNN busted the unions in NYC and Washington becuase they were losing tons of money after 9/11 on all the double triple time hazard pay…for all the tech and on air people in the field around ground zero.
they sub contracted out the help at about 1/2 the price and employees had to get their own insurance…Hired clueless newbies from Iowa. and everybody had to be on-call or no job was offered.
the old Ted Turner run CNN people loved the idea of a normal 8 hour shifts…you had some stability in your working hours…..and not getting called at 9pm for a 5am start time
Merrill Lynch predicts housing prices to fall 20-30% and to keep falling through 2010:
http://tinyurl.com/2kvcnr
Full article on cnn
and Mr Yun’s take on this
“Merrill Lynch’s figures are way too pessimistic, and they are unprecedented,” Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. “There is so much variation in local housing markets, and we see stable price conditions for 2008.”
http://money.cnn.com/2008/01/23/real_estate/merrill_forecast/index.htm?postversion=2008012313
Housing predicts Merrill Lynch prices to fall 20-30% and keep falling through 2010.
(No link provided)
I’m so happy to see these articles from my area. DH and I are renting in NoVA (Alexandria), and I have gotten so sick and tired of all the “housing won’t go down here like everywhere else because we have jobs” argument. Nice to see that it’s not so “different” here after all.
I totally concur with the guy in the one article who says that he isn’t willing to spend 40% of his income on a $400,000 starter home. DH and I feel the same way. We have resisted all kinds of pressure from family and friends to “buy now or be priced out forever!” We will not capitulate. We will continue to live within our means, despise debt, save, save, save, and give, give, give. Ben Bernanke and the “War On Savers” be damned.
Right now we are paying off the student loans (18 more months to go YAY!), saving our downpayment, increasing our reserves (currently at six months), and saving for retirement. At some undetermined time in the future we’ll be moving to somewhere in flyover country where we can buy a home for $200K or less and live on one income. That’s my American Dream.
$200k in flyover country? You must be looking for a mansion
I am looking to spend up to $50k and have been told ill lose most of that $50k. Guess I should spend $15k instead and wait for those $50k homes to be $15k
Here is a link to exactly the predictions here on HHB
http://money.cnn.com/2008/01/23/real_estate/merrill_forecast/index.htm?postversion=2008012313
Couple faced money strains
As Placer jail keeps close watch on woman suspected of drowning baby, records detail financial woes.
Forclosed:
http://www.sacbee.com/101/story/651343.html
From one of the reader comments:
Seems I can’t find anything in this town that isn’t in some way to connected to the real estate crisis.
I don’t know how you make the leap from being foreclosed to killing your 8 day old baby. Something else was going on.
Debt is a poor substitute for income.
Comment by ChrisO
2008-01-23 11:39:47
I vote for the “or so.” Prices in my 22202 neighborhood are ridiculous and have barely started to budge.
Here’s an example. This old house was given the most horrific-looking addition ever by a specuvestor a couple of years ago. I mean, it’s FUGLY! The house has been sitting vacant for well over two years and has never been lived in following the renovation. The first time it was listed, I recall it sitting at about $800k. It’s still sitting at $675k and has never gotten a single bite (I walk by it almost every day and have never seen a single showing or such). The realtor in this listing couldn’t even be bothered to mow the lawn for the picture. Folks, things are going to have to come down a lot more before I would consider buying in my neighborhood.
First that monstrosity needs to be torn down.
What were they thinking?
(((shakin my head)))
Here’s another Prince William County anecdote:
“Virginia homebuilders are pushing the General Assembly to overhaul the cash payment system for each new home in a subdivision for a new system of impact fees for transportation, schools and safety investment.
After fighting such an overhaul for years, homebuilders argue the current system of so-called cash proffers has driven the cost of homebuilding higher, especially with Prince William County’s failed proposal last year to raise its rate 35 percent to $51,113 per home”.
That’s *steep* !!
“‘We have a lifelong financial savings plan crisis in this country today,’ said Joseph DeMattos Jr., the Maryland AARP director, adding that there needs to be some sort of bipartisan political intervention to stimulate a savings spree.”
I guess that clown never heard of 401ks, IRAs, or dividend stocks.
“‘I mean, here we are at $125,000 a year, and to buy a home on the low end means spending 40 percent of our take-home pay. Something ain’t right. I wouldn’t buy in this market, not with rent amounts at half or less of what a house payment would be,’ he said.”
And now, more and more J6P’s who never heard of Ben’s HBB realize that rents are cheaper and PITIM (including maintenance) is far more expensive than it should be. So “no one” is going to buy until they are cheaper than renting.
My sympathy is all used up. My schadenfreude is bored to death. Terror is now taking over. Median price in one of the neighborhoods doubled in five years. What about median income? Well, nationwide, median prices went from $166k in 2001 to $257k in 2006. What about median income? It went from $46,250 in 2001 to about $48,500 in 2006.
So, in 2001 Mr. Median could afford a home worth about $130,000 which implies that he was already starting to live beyond his means. In 2006 mr Median could afford a home costing $135,800.
So, he overpaid, overextended himself by over $125,000.
At this point, with the median at $218k, Mr. Median needs to earn $78,000. Who really believes this is possible in today’s environment?